Delayed Gratification
As we go deeper into investing in real estate and the stock market, the one thing we have learned is understanding that time in the market is crucial. The longer money sits in the market, the longer it has to compound and ultimately build wealth. However, this takes an immense amount of self-control, consistency, and patience.
We want to develop these skills in our children so we are very intentional about teaching our children delayed gratification.
Delayed gratification is an important tool for children because it establishes a lifelong precedent of waiting a period of time for something that you want. Children who do not delay gratification have been linked to adults who struggle to resist temptation and achieve their goals.
To instill this habit of waiting for money to grow, we often take cash that has been gifted to our daughter and apply this concept. Her initial wish is almost always to go to the toy store to buy something, but we convince her to instead take advantage of the opportunity to let that money grow.
No amount is too small. We have had her deposit $5 at the bank and tell her that it can become $10 if she just gives it some time. It is a great way to normalize setting aside money instead of experiencing that immediate reward.
Research has shown that at age four, children develop the ability to deal with future-oriented situations. At age five, children exhibit cognitive strategies needed to delay gratification. These habits and neuronal connections can be made at an early age to set them up for future success.
Another great thing to do is talk to your kids about how you are using delayed gratification yourself to build wealth. We spend a lot of time making it a process they can be involved in so they can model our behavior of avoiding instant gratification as they get older.
It is never too early to show them how to invest, budget, and ultimately teach them how to make their money work for them.